Buying goods at unintentionally low prices

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Who is in the right, the vendor or the consumer?

With shopping events such as Black Friday, Cyber Monday, Christmas, Boxing Day and January sales now just around the corner, there are huge numbers of deals and offers being made this time of year in a bid to boost sales.

You may have read in the news or seen first-hand instances of pricing glitches, where goods have been mistakenly advertised at a lower price. Consumers and vendors alike are often unsure whether the vendor is in fact obliged to sell for that lower price.

To answer that, it is crucial to ascertain if there is a contract. A contract is generally formed when an offer made by one party is accepted by another party, both having the intention to enter a binding agreement and both providing consideration (something in exchange – e.g. goods or money).

Some may think an offer is accepted when the consumer agrees to purchase the selected item at the advertised price. Under contract law, however, it is in fact usually the consumer that offers to buy the goods and the vendor then agrees to sell, taking your money and providing you with the goods. Case law has established that advertising goods for sale is usually just an “invitation to treat”, merely an indication that the vendor may be willing to contract on those terms.

Because of this, when an item is taken to the till, the vendor has the final say on whether or not to sell. If the vendor spots the advertised price is incorrect before the sale is complete then you cannot compel the vendor to sell for the lower price. You are, at that point, technically still in negotiations as to the terms of the contract. You can, of course, ask the vendor to honor the advertised price and may find that some are willing to do so.

If you have already bought the item for the lower amount then it follows that you will have probably made a binding contract. You do not, therefore, have to confess their error or return the item and the vendor cannot, in most cases, cancel or request further payment.

If, however, the vendor had specifically said the price would be say £100 and you proceed with the sale then you may be deemed to have accepted that price, even if it then went through at a lower price. This is because acceptance can be inferred by your conduct in proceeding with the purchase, aware of the true price. If the vendor had then just inadvertently put it through the till at say £10, the vendor can probably justify seeking the difference from you.

If you paid more for an item than advertised due to, for example, being overcharged at the till, then you should get a refund for the overpayment. It is a good idea to keep evidence of the mistake if you can – for example, taking photos of the advertised item and keeping your receipt. This will help you to demonstrate there was a mistake which most vendors should rectify without too much delay.

Shopping online

The law in respect of online purchases is trickier than a standard shop transaction, probably because you do not tend to receive the goods there and then. Depending on the vendor’s terms and conditions and the specifics of the transaction, a contract may be formed when payment is made, on receipt of confirmation from the vendor or when the item is delivered. Automatic confirmation emails may serve only to reassure you that your order (offer) has been received and may not amount to formal acceptance by the vendor.

If an online pricing error is spotted before the contract has been made, the vendor can usually cancel the order. They will, however, probably prefer to request the difference from you in order to retain the sale.

If the error is spotted after the contract is made then the vendor cannot usually cancel the order, except in certain circumstances – for example, where the vendor can demonstrate it was a genuine and honest mistake on their part which you should have noticed. This exception may apply if, for example, a new car was sold online for £20 instead of £20,000, the latter being the obvious intended price. Again, you can always ask the vendor to honor the actual sale price, although it is very unlikely they would so in that instance!

The upshot is that contract law is not always clear and much depends on the particular circumstances of a transaction. If you have a disagreement with a vendor or are a business seeking advice please contact the Commercial Litigation team at Hunt & Coombs on 01733 882800.

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